Wold Gold Council Records Key Drivers of Gold in 2019

The Council groups the gold drivers into four categories and notes that interactions between these categories are likely to determine gold’s short-term and long-term performance.

SEATTLE (Scrap Monster): The latest edition of Investment Update published by the World Gold Council (WGC) analyzes the major drivers of gold prices in 2019.

The Council groups the gold drivers into four categories and notes that interactions between these categories are likely to determine gold’s short-term and long-term performance. Expansion, Risk and Uncertainty, Opportunity Cost and Momentum are the four categories into which gold drivers are grouped into. Out of this, the first two categories are normally decisive while deciding on gold investment. The expansion of economy boosts long-term savings as well as short-term jewellery purchases. Also, heightened market risks and uncertainties tend to lift gold’s appeal as a safe-haven investment.

According to WGC, gold is entirely different from all other assets as it appeals to both investors and consumers. Investors often consider gold as a tool for diversification of assets portfolio and also as a medium for long-term investment. The consumers of gold use it mainly in the form of jewellery.

The monetary policy announcement by the U.S. Federal Reserve and the direction of the U.S. dollar are the key trends to watch for in 2019. Market expectations hint at a shift in monetary policy from tightening to neutral. Based on the most recent cycles, WGC notes that gold tends to perform well in post-tightening cycle. In short, a dovish stance by the U.S. Fed coupled with rangebound U.S. dollar is likely to eliminate some of the strong headwinds that gold faced during the previous year.

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